On Tuesday, stocks initially declined but managed a significant recovery as trading progressed. The Nasdaq and S&P 500 moved from early losses to gains, while the Dow was unable to escape its downward trend.
By the end of the day, the major indexes presented mixed results. The Dow decreased by 120.66 points, or 0.3%, finishing at 43,268.94. Conversely, the S&P 500 rose by 23.36 points, or 0.4%, to 5,916.98, and the Nasdaq surged by 195.66 points, or 1.0%, to 18,987.47.
The early volatility on Wall Street was driven by heightened tensions between the U.S. and Russia concerning the conflict in Ukraine. Following President Joe Biden's authorization for Ukraine to use American-manufactured long-range missiles on Russian targets, President Vladimir Putin of Russia revised the nation's nuclear policy.
Kremlin Spokesperson Dmitry Peskov articulated that the amended doctrine allows for nuclear weapon use if conventional weapons pose a substantial threat to Russia or Belarus's sovereignty or territorial integrity. Peskov indicated that any conventional aggression against Russia from a non-nuclear state, which involves or is supported by a nuclear state, will be treated as a joint assault.
Reports suggested that prior to Russia's announcement of its nuclear doctrine changes, Ukraine applied U.S.-provided long-range missiles to strike a Russian facility in the Bryansk region.
Selling pressure eased not long after the trading began, notably influenced by a spike in Nvidia’s (NVDA) stock, bolstering the Nasdaq's recovery. Nvidia’s shares rose 4.9% ahead of its anticipated release of fiscal third-quarter earnings on Wednesday.
Meanwhile, retail behemoth Walmart (WMT) enjoyed an upward move following third-quarter outcomes that surpassed expectations, coupled with an improved full-year outlook. In contrast, Lowe's (LOW) shares fell, despite exceeding third quarter estimates, as it projected a decline in full-year sales.
Sector Analysis
Computer hardware stocks advanced significantly, following a rebound in the previous session, with the NYSE Arca Computer Hardware Index climbing 3.3%. This upward trend continued after a two-month low had been reached last Friday. Super Micro Computer (SMCI) led the sector gains after selecting BDO as its new independent auditor and presenting a compliance strategy to Nasdaq.
Gold stocks also displayed robust performance due to rising gold prices, with the NYSE Arca Gold Bugs Index climbing 2.3%. Conversely, airline stocks plummeted, as reflected by a 4.6% dive in the NYSE Arca Airline Index.
Global Markets
In the Asia-Pacific region, stock markets mostly rose on Tuesday. Japan's Nikkei 225 Index increased by 0.5%, and China's Shanghai Composite Index gained 0.8%.
However, European markets faced downturns. The U.K.'s FTSE 100 Index slightly dipped by 0.1%, while both France's CAC 40 Index and Germany's DAX Index declined by 0.7%.
In the bond market, treasuries retreated from an early rise but remained in positive territory, with the yield on the ten-year note, inversely related to its price, decreasing by 3.5 basis points to 4.379%.
Outlook
The lack of significant U.S. economic data could result in a quieter trading session on Wednesday. However, developments overseas and remarks from several Federal Reserve officials might still influence market activity.
